The Agricultural Bank of Egypt (ABE) achieved a remarkable improvement in its business result indicators and performance in 2023. It ended the year by reaffirming its role as one of the leading banking institutions specializing in financing the agricultural sector.
In 2023, the bank achieved high growth rates in the volume of its business, driven by a set of policies and procedures adopted by its Board of Directors led by Alaa Farouk. These resulted in the substantial expansion of the bank’s business volume. Meanwhile, the comprehensive development plan implemented by the bank across all sectors started to yield positive outcomes. This was reflected in the confidence and satisfaction of the bank’s customers, as a result of the enhanced quality of the bank’s services.
Loan portfolio
According to a statement by the bank, the size of the loan portfolio reached EGP 78.826bn in December 2023, with a growth rate of 23% compared to its volume in December 2022, which amounted to about EGP 63.973bn, with a growth rate of 142% over the last two years. The number of clients benefiting from these loans amounted to 543,177, confirming the success of the bank’s strategy and its rigorous credit policies to link lending to production.
On the other hand, the bank’s deposit portfolio witnessed a significant increase of 30%, rising from EGP 141.244bn in December 2022 to EGP 184.252bn in December 2023, an increase of EGP 43.008bn, with a growth rate of more than 200% in two years. It reflects the extent to which customers are impressed by the bank’s ability to manage their savings and facilitate their transactions according to the latest banking systems. Additionally, it indicates the growth of the retail banking sector, whose portfolio size reached EGP 14.847bn, benefiting about 97,336 customers, representing 18% of the total size of the credit portfolio, and a growth rate of 29% compared to the previous year’s.
Medium, small, and micro enterprises
According to the classification of the loan portfolio, the bank achieved significant growth in the volume of loans directed to finance micro, small and medium enterprises. It accounted for about 64% of the bank’s total loan portfolio, given the importance of this vital sector in supporting the national economy and creating job opportunities, especially in the agricultural sector.
The bank explained that the number of micro-projects that the bank financed by the end of December 2023 amounted to 438,943 projects for individuals and companies, which received financing worth EGP 35.796bn, with a growth rate of 9%, while the number of small enterprises reached 6,614, whose financing amounted to EGP 6.497bn, with a growth rate of 11%. The number of medium enterprises increased from 98 to 118, which received financing worth EGP 4.989bn, with a growth rate of about 50%. This reflects the great interest that the bank attaches to developing this sector.
At the same time, the bank’s role in financing major projects and companies has grown. The number of major companies financed by the bank increased from 119 with a financing volume of EGP 10.563bn in December 2022 to 166 companies with a financing volume of EGP 16.698bn in December 2023, with a growth rate of about 58%, which is a new achievement.
Agricultural sector and related industries
According to the bank, loans directed to support and finance the agricultural sector and related industries account for about 80% of the total size of the credit portfolio, as the bank doubled the volume of financing directed to the production of crops in 2023, which small farmers obtain with a return of 5%. The bank also revised credit categories for crops more than once in less than a year, at rates ranging between 25 and 70%, to help farmers cope with the significant increase in the costs of production inputs. The size of the crop loan financing portfolio reached EGP 23.629bn in December 2023, compared to EGP 10.5bn in December 2022, with a growth rate of 123%.
The bank aims to increase the number of beneficiaries of loans granted to small farmers and rural producers and agricultural projects in new development areas, to stimulate investment in the agricultural sector. Moreover, the bank seeks to promote the concept of entrepreneurship, as the engine of economic growth. It activated the role of development service centres within the NilePreneurs initiative, in compliance with the directives of the Central Bank of Egypt (CBE). 12 business development centres were opened, as part of a plan to open 30 centres in all governorates.
ABE has also stepped up its efforts during the last period to support and finance individuals and companies benefiting from major agricultural reclamation projects, which aim to increase the agricultural area, such as the Egyptian Rural Development Project and others, through providing financing programs that meet the needs of all farmers, including EGP 1.6bn to fund the agricultural projects in the New Valley.
Contract farming
Contract farming had a large share in the bank’s policies and work plans, which helped increase the volume of financing directed to contract farming to more than EGP 2.2bn, including EGP 1.6bn to cultivate 130,000 feddan of sugar cane in Upper Egypt, and EGP 136m to finance contract farming of wheat, from which over 5,000 farmers benefited and cultivated 14,000 feddan, in addition to EGP 49m to finance the contract cultivation of strawberries and sugar beets.
As part of the efforts made by ABE to support and develop livestock, the size of the financing portfolio for livestock production projects reached EGP 10.199bn in 2023. The bank was also keen on financing small breeders and farmers to encourage them to raise genetically improved, highly productive cows, following the directives of President Abdel Fattah Al-Sisi. The President has emphasized the need to improve the standard of living of small farmers and breeders and encourage them to raise genetically improved livestock breeds. In addition, the amount of funding directed to establish and develop dairy collection centres amounted to about EGP 335m to finance 84 centres.
